House introduces ‘Credit Cardholders’ Bill of Rights’
Editor’s note: See more recent items, Obama signs credit card reforms into law, Credit card reform legislation timeline
Now that presidential candidates, senators and the Federal Reserve have all weighed in with their thoughts on credit card reform, it looks like the House of Representatives has decided to have its turn.
House Financial Institutions and Consumer Credit Subcommittee Chairwoman Carolyn B. Maloney today introduced the “Credit Cardholders’ Bill of Rights Act of 2008” (H.R. 5244), “comprehensive credit card reform legislation aimed at leveling the playing field between credit card companies and consumers.”
The bill is aimed at “major industry abuses that unfairly hurt consumers while fostering fair competition and free market values,” A summary of the bill provides the highlights:
- Requires card companies to give cardholders 45 days notice of any interest rate increases.
- Prevents the so-called “universal default” rate increase.
- Prevents the so-called “double-cycle billing” practice.
- Gives cardholders time to pay their bills by requiring card companies to mail billing statements 25 calendar days before the due date (14 days is the current minimum).
- Requires that payments made before 5 p.m. EST on the due date are considered timely.
- Prohibits card companies from charging late fees when a cardholder presents proof of mailing his/her bill within 7 days of the due date.
- Prevents card companies from charging over-the-limit fees on a cardholder with a fixed credit limit.
“A credit card agreement is supposed to be a contract, but in recent years cardholders have lost the ability to say no to unfair interest rate hikes and fees,” said Maloney, a Democrat who represents Manhattan and Queens. “This balanced, moderate bill simply levels the playing field between card companies and cardholders while fostering fair competition and free market values. It sets no rate caps, fees, or price controls, nor does it dictate any business models to card companies.”
The bill has broad Democratic support, with the release naming House Financial Services Committee Chairman Barney Frank and 40 representatives as original co-sponsors.
A spokeswoman for Maloney’s office said hearings are likely to begin in early spring.